Amazon is considered one of the cheapest Big Tech companies due to various growth drivers.

From Nasdaq.: 2024-06-05 15:11:27

All ‘Magnificent 7’ stocks, except Tesla, are trading near all-time highs, making them generally not cheap options. However, recent discounts have made buying quality tech stocks at lower prices a reasonable choice. Nvidia leads the pack, up 142% YTD, followed by Meta and Alphabet. Tesla is the worst performer with a 29.3% YTD loss.

Alphabet boasts the lowest forward PE multiple of 22.56x among the Magnificent 7 stocks, closely followed by Meta Platforms. Apple, Microsoft, Amazon, and Nvidia follow in ascending order, with Tesla showing the highest forward PE multiple at 95x. Amazon and Tesla are currently trading at discounts compared to their 3-year averages, making them potentially attractive options for investors.

Looking at the Price/Earnings-to-Growth (PEG) ratio, Meta Platforms has the lowest multiple of 1.21x, with Amazon and Nvidia close behind at 1.28x. Microsoft and Apple follow, with Tesla having the highest PEG multiple of 4.39x. Despite being part of the same elite group, each Magnificent 7 stock shows varying dynamics in terms of valuation metrics and AI play odds.

In terms of valuation metrics and expected growth, Amazon appears to be one of the cheapest Big Tech companies. The company benefits from various growth drivers like Amazon Business, pharmacy services, and ad business, solidifying its position as a diversified player across multiple industries. While Amazon’s PE multiple may seem high, its price-to-free cash flow multiple is among the lowest, making it an attractive option for value seekers.



Read more at Nasdaq.: Which is the Cheapest ‘Magnificent 7’ Stock to Buy in 2024?